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ABB Electronics Case Study

The Supply Chain Consulting Group Complete Inventory Policy Review For ABB Electronics

ABB Electronics (ABB) is a pioneering technology leader that is writing the future of industrial digitalisation. For more than four decades, ABB have been at the forefront, innovating digitally connected and enabled industrial equipment and systems. Every day ABB drive efficiency, safety and productivity in utilities, industry, transport and infrastructure globally. With a heritage spanning more than 130 years, ABB operates in more than 100 countries and employs around 132,000 people. 

ABB are leaders in digitally connected and enabled industrial equipment and systems with an installed base of more than 70,000 control systems connecting 70 million devices. 

ABB’s current National Distribution Centre (NDC) a pick/pack and despatch operation for the UK Low Voltage Products (LVP) occupied approximately 15,000ft2 of floor space in a shared user facility in Rugby, which was owned and operated by a Third Party Logistics provider (3PL). This facility was over 14.5 meters high, requiring a high volume and frequency of fork lift truck movements, whilst also relying heavily on the automated Pickomat system.   

The number of SKU’s at the NDC ranged between 8,000-9,000 with c.800 new or upgraded SKUs per year. The picking rates were approximately 800 lines per day with an average of five items per customer order. The waiting time at Rugby for goods receipt and put-away into an available location was between 24-48 hours.    

A number of the customer orders would be picked and despatched to an off-site contract packer, where they would then be packed into customer specification packs and returned to the NDC for despatch to the customer, which consequently meant increased handling requirements and transport costs.  

The ABB management team wished to investigate improved cost and operational alternatives to the current NDC operation through de-automation and increased manual pick face areas and access. For support and expert knowledge for this project, the ABB management team requested the help of UK Specialist Logistics and Supply Chain Consultancy, The Supply Chain Consulting Group (SCCG). 

With support from the Specialist Supply Chain and Logistics Consultants, the ABB management team were able to rationalise ABB’s SKU range by identifying potential duplicate SKU and from this, determine the appropriate levels of stock for the remaining SKU’s to meet agreed service levels, based on a single or dual warehouse solution.  

After the SCCG team identified potential duplicates, the ABB management team were responsible for confirming the genuine duplicates based on technical knowledge of the products. 

Throughout the scope of this project, the SCCG team focused on the current stocked SKU’s within business operations in the UK and Ireland, whilst simultaneously considering any non-stocked SKU’s which had sufficient activity to justify being stocked. 

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